A report was published on Wednesday that heightened the economic implications of Brexit on various segments in the British economy. This report assessed an array of possible outcomes from the Brexit plan. Consequently, the main Bank in Britain published its own assessment of Brexit.
All assessments indicated a negative outcome of the Brexit plan. They show that the UK would fall into a far worse economic situation if it were to leave the European Union. Although no quantifiable impact has been placed on the deal between Theresa May, the Prime Minister and the European Union, preliminary studies show that even in the most optimistic situations, the United Kingdom stands disadvantaged compared to nations left in this bloc.
The UK Treasury Chief, Phillip Hammond told BBC confirmed that the economy will be a bit smaller, but doing the deal as the Prime Minister had suggested and negotiated, the outcome will be more manageable.
Despite Mr. Hammonds statement, official estimates show adverse economic effects on Brexit; Under any circumstance, Britain’s decision to exit the EU (European Union) would leave it poorer. Hammond continues to comment that, according to principles of economics, staying in a single market gives a country some economic advantage. This means that Brexit will shed off some economic advantage.
The Bank’s assessment points out that, Prime Minister May’s plans could raise trade barriers between the UK and the nation remaining in the European Union. This is set to hurt Britain’s economy. With only 4 months left until the deal is signed, we cannot ascertain if Prime Minister May will provide a sober exit from the European Union.
The final deal is predicted to give businesses some certainty in the coming two years. However, Prime Minister May still needs to seek approval from an adamant parliament. Consequently, a less tight agreement is still needed to manage the relationship between the UK and nations left in EU.
A group championing for another referendum on the Brexit decision has commissioned an analysis report that shows that the UK economy will be 4% worse off by 2030. On Monday, the NIESR (National Institute of Economic and Social Research) pointed out that additional trade barriers by the UK would hamper trade by discouraging investments.
In the event that May’s plans fail, alternative plans include exiting the EU minus a deal or another referendum or general elections in Britain. The most significant decision is to ensure trade consistently flows as stated by Hammond on Sky News.
Futuristic analyses indicate that May’s plan allows for a transition period in which most trade rules and guidelines will still be the same for many companies. This would also infer a close relationship between the European Union and the UK in terms of financial services, transport, and energy.
Estimates by the government are based on the assumption that during the transition period, Britain is free to sign trade agreements with other developed economies like the United States. However, this is not guaranteed. Economists forecast that the worst possible exit might be a messy exit that would drive UK’s economy into recession.
The government also points out that leaving the EU minus a deal could decrease UK’s economy by 7.7% in 15 years to come. This outcome is based on the assumption that there are no changes in trading arrangements and immigration. If these two factors change, the effects could be much worse.
The British Industries in unison highlights the government’s assertion that leaving the EU without a desired deal will be a bad outcome. This goes ahead to put off insane ideas that a crashing exit would do uncontrollable harm to UK’s economy.